Welcome to the new week and today's edition of what I'm reading, which could be titled, "The Fed Gazette."
Who's the greatest?
It's easy to blame the Federal Reserve for doing too little or too much -- or for its mere existence. Which is why it's important to remember just how dire the situation was back in 2008 and 2009 and how daring Chairman Ben Bernanke was in dealing with it. Binyamin Appelbaum's fine profile in the New York Times refreshes the memory. Former Fed chief Alan Greenspan may have been feted as the "greatest central banker who ever lived" at the 2005 Jackson Hole symposium, but Bernanke's job was a lot harder than anything Greenspan even contemplated in his 18 years.
The headline says it all.
"At Fed Conference, Everyone Knows How to Make an Exit," reads the Wall Street Journal headline. The Fed should stop buying Treasuries. It should continue buying mortgage-backed securities. It should communicate more clearly. It should outline a long-term plan and stick to it. It should not be in a rush to taper asset purchases. Why, with so many back-seat drivers presenting unverifiable results from econometric models, no wonder Ben Bernanke stayed home!
Just say "no" to emerging markets.
Many of the central bankers and economists attending the Jackson Hole symposium over the weekend urged the Fed to consider the repercussions to emerging markets in their decision to taper asset purchases. In recent weeks, money that had chased higher yields in emerging markets staged a major retreat. Alas, preventing volatility in overseas markets is still not part of the Fed's mandate.
Differentiating craft from science.
"It’s easy to understand why economics might be mistaken for science," write philosophers Alex Rosenberg and Tyler Curtin in the New York Times. It looks a lot like physics in its use of mathematical equations, but it lacks "the most important of science's characteristics:" an improvement in predictive power. Rosenberg and Curtin suggest the search for a new Fed chief focus on someone "who understands that economics is not yet a science and may never be." Otherwise, he or she will have to learn that on the job.
You can say that again.
"Unseemly" is what the Washington Post editorial board calls the campaign for Fed chairman. All the discussion about the views of Janet Yellen and Larry Summers on monetary policy and regulation miss the point. "What the most important central bank in the world really needs is a leader to make monetary policy in the public interest, without regard for the short-term needs of politicians," the Post editors write, offering a crucial counter to President Barack Obama's comment on what he needs.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)